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Mongolia|business|June 13, 2016 / 03:06 PM
Rio Tinto eyeing $6-bln copper deal in Mongolia

AKIPRESS.COM - rio-tinto Rio Tinto has sounded out potential partners for a $US6 billion-plus tilt at privatizing its mammoth copper project in southern Mongolia, according to Financial Review.

Thus, investment bankers at Goldman Sachs working for Rio Tinto have had discussions with potential co-investors in the New York-listed Turquoise Hill Resources.

Turquoise Hill owns 66 percent of Oyu Tolgoi, which is a large copper, silver and gold mine in Mongolia that Deutsche analyst Paul Young has described as, "the best undeveloped copper project globally and probably the best undeveloped asset in the industry."

Oyu Tolgoi represents a genuine growth opportunity for Rio which has emerged from the worst commodities downturn in decades in relatively strong shape.

The Anglo-Australian miner's new chief executive Jean-Sébastien Jacques is open to copper acquisitions, while commodity prices remain low. Copper is regarded as a sensible growth option for the big miners given there are few mines of genuine quality being developed around the world and demand for the metal goes beyond construction.

The ownership structure of Oyu Tolgoi means Rio owns about a third of the mine. Rio may consider a privatization of Turquoise Hill more attractive and lower risk than a takeover of another mine because it is already familiar with the Mongolian asset.

Rio shares are down around 18 percent over the last 12 months.

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